Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

TSR Inc (NASDAQ:TSRI) is a small computer staffing company in Long Island. This week, Daniel Zeff’s Zeff Capital sent a troubling letter “expressing the continued grave concerns of the Reporting Persons that the Board is acting in a manner that is not consistent with shareholder interests and further expressing serious concerns about a lack of proper internal controls, in addition to troubling questions about the Board’s commitment to required transparency.

The letter included the following statements:

“In the last three months, TSR has added four new directors (none of whom own any stock), imposed an onerous and uncustomary poison pill, amended the Company’s bylaws to eliminate the ability of stockholders to call special meetings, failed to appropriately report the disagreements of a director who chose to resign, and increased both the salary and bonus of the CEO so that he now makes more than TSR’s total net income. There has been no report on the progress of the Special Committee.

As you know, the CEO was promoted in July 2017, well over a year ago, and there is no evidence that he is capable of (or interested in) improving stockholder value. On the contrary, the CEO is primarily focused on lining his own pockets, just like his predecessor. TSR reported that revenues and consultants on billing declined in the fourth quarter. Shareholder value is being destroyed.

We truly hope that the recently added Board members, including Ira Cohen and Joe Pennacchio, who are purportedly there to assist the Special Committee in its evaluations, will convince the other Board members (and the existing Special Committee members, including you and Brian Mangan) of the necessary actions to take to maximize stockholder value. We are also of the belief that the new Board members are aware of the value of TSR. It is time for the Board to act to preserve stockholder value before further damage is done.”

I don’t want to spend too much time on this tiny company that had only 54 shareholders at the end of June. However, I have a feeling that Zeff Capital isn’t telling the whole story, so I went through TSR Inc (NASDAQ:TSRI)’s 10-K. The company has no debt and about $5.5 million in cash and another $7.5 million or so in accounts receivables. So, if the company shuts the doors today, it will have about $13 million in assets. Its stock closed at $7.43 on Friday, corresponding to a market cap of slightly more than $14 million.

That’s interesting because Zeff Capital offered to buy TS for $6.15 a share a year ago and recently purchased shares from TSR founder Joseph Hughes and his wife who are parents of the company’s current CEO for a price of $6.25 per share. Basically, Zeff Capital wants to pay the company whatever liquid assets (cash, marketable securities and accounts receivables) it has, and take over the underlying business for free.

If you are interested in following the developments in this struggle, you can enter your email address below to receive free email alerts.

Follow Tsr Inc (NASDAQ:TSRI)Follow Tsr Inc (NASDAQ:TSRI)

Trade (NASDAQ:TSRI) Now!

We may use your email to send marketing emails about our services. Click here to read our privacy policy.

The only recommendation we have for our readers is that they should stay away from company. It shouldn’t have been a publicly traded stock. The founders should have borrowed some money and taken the company private long-time ago.

If you are looking for market beating stock ideas, you should check out our newsletters. Our flagship hedge fund investment strategy returned 121% since its inception through the end of August, and outperformed the S&P 500 ETF (SPY) by 54 percentage points. You can check out the details here.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.

Subscribe me to Insider Monkey's Free Daily Newsletter

This is a FREE report from Insider Monkey. Credit Card is NOT required.

We may use your email to send marketing emails about our services. Click here to read our privacy policy.